OUCH! Free Content gets hurt by enabled Ad Blockers

Despite the defeat of a ’Net neutrality amendment in the U.S. Congress in early June, the heated debate about whether network operators should be able to charge some Web sites and content providers more than others isn’t going away. At first glance, it might seem that in a market economy, infrastructure providers should be able to charge whatever they want. But a case in Canada provides a perfect example of why that might not work well.

On one side of the ’Net neutrality debate are the infrastructure providers. In the U.S., these include companies like Verizon and AT&T. They argue that they should be able to charge some Web content providers more than others and apply QoS schemes for traffic like voice and video. The reason for allowing tiered services is that Internet traffic is booming and infrastructure players say they need to charge more to cover their infrastructure build-out expenses.

On the other side of the neutrality debate are content providers such as Google, Yahoo and Microsoft, as well as academics and consumer groups. They argue that allowing infrastructure providers to charge content providers more for some services will ultimately create a two-tiered Internet — one for the rich (or those well-connected to the infrastructure providers) and one for the poor.

In Canada, Shaw Communications recommends that users signing up for non-Shaw VoIP services pay a $10 monthly QoS fee to ensure their voice service is reliable. That doesn’t seem like an unreasonable policy. After all, VoIP requires higher QoS treatment than, say, file sharing. The catch in this case is that in addition to being an infrastructure provider, Shaw also offers a cable telephone service, which competes directly with other VoIP offerings. By recommending consumers pay a fee to ensure their non-Shaw VoIP is reliable, Shaw is making its own voice offering more attractive.

In an ideal world, the Internet would be ruled by market forces. Unfortunately, infrastructure providers can’t be trusted to treat all content providers equally, so some regulation is going to be necessary to ensure healthy competition.